[Official Guidance]
Text of Draft of Primary 'My PAA' Screens (PBGC Premium Payment Form) for Plan Year 2015 Comprehensive Premium Filings
57 pages, as submitted to OMB January 12, 2015. "The following screens ... reflect the primary changes for 2015 ... [1] Enter Plan Sponsor and Administrator Information Screen: The alternative phone number and extension have been added ... [2] Report Miscellaneous Information Screen: The Risk Transfer Activity questions have been added ... [3] Data Summary: The alternative phone number and extension, and Risk Transfer Activity questions have been added ... [4] Enter Plan Sponsor and Administrator Information Screen: The alternative phone number and extension have been added ... [5] Report Miscellaneous Information Screen: The Risk Transfer Activity questions have been added ... [6] Data Summary: The alternative phone number and extension, and Risk Transfer Activity questions have been added."
(Pension Benefit Guaranty Corporation [PBGC])
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[Official Guidance]
Text of PBGC Supporting Statement to OMB: 2015 Revisions to Payment of Premiums and PBGC Forms and Instructions
"PBGC intends to revise the 2015 filing procedures and instructions to: [1] Require reporting the numbers of persons involved in certain risk-transfer transactions (lump sum windows and annuity purchases); [2] Change certain premium filing certification procedures; [3] Eliminate due-date phase-in instructions that are no longer needed; [4] Provide additional guidance about exercising small-plan look-back rule options; and [5] Offer the opportunity for a plan to provide a telephone number specifically for inclusion in PBGC's 'Is My Pension Insured?' List on PBGC's web site, instead of the number provided for PBGC to contact the plan administrator."
(Pension Benefit Guaranty Corporation [PBGC])
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[Official Guidance]
Text of NTIS Proposed Regs: Certification Program for Access to the Death Master File
"The National Technical Information Service (NTIS) issues a proposed rule that would, if implemented, establish a program ... through which persons may become 'certified' and thereby be eligible to obtain access to Death Master File (DMF) information about an individual within three years of that individual's death ... This rule sets forth requirements to become a certified person, establishes a process for third party attestation and auditing of the information safeguarding requirement for certification, provides that certified persons will be subject to periodic scheduled and unscheduled audits, and sets out penalties for persons who disclose or use DMF information in a manner not in accordance with the Act." [h/t American Benefits Council]
(National Technical Information Service [NTIS])
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[Official Guidance]
2014 IRS Form 1098-Q (PDF)
"The information on this Form 1098-Q is submitted to the IRS by the issuer of your qualifying longevity annuity contract (QLAC) to report the status of the contract. The value of any QLAC purchased after July 1, 2014, held by your plan or IRA (section 401(a), 403(a), 403(b), 408 (other than a Roth IRA) or eligible governmental plan under section 457(b)), is not included when calculating the required minimum distribution (RMD) from your plan or IRA."
(Internal Revenue Service [IRS])
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Consumer Preferences for Lifetime Income Estimates on 401(k) Statements
"Over 90% of survey respondents -- regardless of age, income level, or 401(k) plan balance -- want their 401(k) statements to include estimates of lifetime retirement income.... The survey found no overwhelming preference for one type of retirement income estimate, and some correlation of preferences were seen with age, income, and plan balance levels.... More than 75% of survey respondents stated they would increase their contribution level by four percentage points or more after seeing estimates of lifetime retirement income.... Over 90% of survey respondents stated they want their employers to provide them with online retirement income calculators so they can use their own assumptions to calculate estimates of lifetime retirement income."
(Insured Retirement Institute [IRI])
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Treasury's Mark Iwry Says Department Looking Into Guaranteed Withdrawal Products for DC Plans
"New Treasury Department rules on using deferred annuities within target-date funds as part of a defined contribution plan shouldn't be viewed as excluding the department's consideration of other lifetime income options in those plans, said J. Mark Iwry, deputy assistant secretary for retirement and health policy.... Because guaranteed withdrawal benefit products are different from standard fixed or variable annuities, the Treasury Department and IRS must 'look at how they fit into qualified (DC) plans,' Mr. Iwry said."
(Pensions & Investments)
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2015 Annual DC Plan Deadlines (PDF)
11 pages. "The [included] chart provides an explanation of key plan events for Section 401(a) and 401(k) defined contribution plans and the deadline for each. The chart is intended as a tool to assist employers with monitoring the key annual plan requirements."
(VOYA Financial)
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SEC's 2015 Exam Priorities Put Emphasis on Retirement Savers
"The regulator will explore risks associated with increasingly popular alternative investments designed to generate high yields amid low interest rates 'as investors are more dependent than ever on their own investments for retirement' ... This year's priority letter -- at four-and-a-half pages -- is less than half the size of last year's letter. It is designed to warn advisers what to expect on exams."
(InvestmentNews)
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Even Safety-First Retirement Income Strategies Are Probability-Based -- The Real Distinction Is Risk Transfer vs. Risk Retention
"[P]ortfolio-based strategies built around a 'conservative enough' safe withdrawal rate effectively are a safety-first approach, while safety-based strategies using annuitization or pensions can still have at least some risk (as evidenced by the history of insurance/annuity company failures, and the growing shortfall of the PBGC in backing failed pensions). Perhaps instead a better way to recognize the range of retirement income strategies is based on whether retirees trust in insurance and annuity guarantees and choose to transfer the risk, or instead 'trust' in markets and the equity risk premium in the long run and choose to retain the risk while seeking appropriate strategies to reduce or avoid the danger of a shortfall along the way!"
(Michael Kitces in Nerd's Eye View)
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The Case For and Against Taking Your RMD Early in the Year
"Reasons to Consider Taking Your [2015] RMD Now: [1] You don't have to worry about the 50% penalty ... [2] Don't leave beneficiaries with a tight window ... [3] You can convert or rollover the remainder of the account ... Reasons to Wait Until Later This Year to Take Your RMD: [1] Giving up tax deferral ... [2] No [qualified charitable distribution] provision currently in place ... for 2015(.]"
(Slott Report)
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How to Avoid Being Forced Out of Your Former Employer's 401(k)
"[If] it's been a while, it can sometimes be difficult to track down former accounts. The first step is to try to get in touch with your former employer. You can also request a Potential Private Pension Benefit Information notice from the Social Security Administration to see if they have any information on file about your former 401(k) plan. The SSA says that between 2004 and 2013 workers left more than 16 million accounts containing $5,000 or less in the plans of former employers cumulatively totaling $8.5 billion."
(U.S. News & World Report)
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CalPERS Annual Fiscal Report for Fiscal Year Ending June 30, 2014
"[K]ey findings ... include: [1] An estimated funding level of 77 percent for the Public Employees' Retirement Fund (PERF) -- a positive growth of more than 7 percentage points.... [2] Surpassed $300 billion in assets for the PERF for the first time with an 18.4 percent return on investments.... [3] Negotiated heath care premium cuts of about 3 percent for almost 600,000 members while containing increases for hundreds of thousands more.... [4] Increased the number of contracted employers that are taking advantage of prefunding future retiree health care obligations by 15 percent through the California Employers' Retiree Benefit Trust Fund."
(CalPERS)
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[Opinion]
American Academy of Actuaries Letter to IRS on Qualified Longevity Annuity Contracts in Defined Benefit Plans (PDF)
"If defined benefit plans could directly provide QLACs, the lump sum option could be structured to provide a partial lump sum equal to the present value of all payments to be made before a certain age ... Many employers sponsor both a defined benefit plan and a defined contribution plan. Revenue Ruling 2012-4 allows such employers to accept rollovers from the defined contribution plan the defined benefit plan for the purpose of providing lifetime income, but does not currently provide that the lifetime income could be provided as a QLAC. Allowing the defined benefit plan to provide a QLAC in consideration of the rollover would enable more plan participants to have access to a QLAC."
(Pension Practice Council of the American Academy of Actuaries)
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[Opinion]
American Academy of Actuaries Comment Letter to PBGC on Late Retirement Actuarial Equivalence (PDF)
"PBGC has taken a preliminary position that we believe runs counter to sound actuarial practice, and that will lead in some cases to inappropriately large retirement benefits.... PBGC is interpreting plan provisions governing actuarial equivalence in a manner that results in benefits that are not actuarially equivalent.... Plans that specify pre- and post-retirement mortality assumptions separately -- rather than implicitly using the same assumption for both -- are being singled out for an interpretation that was never intended, never followed in practice, and actuarially incorrect."
(American Academy of Actuaries)
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[Opinion]
False Savings: The Myth of the 401(k) as a Replacement for Public Pensions
"Defined benefit pension plans are not inherently problematic. Issues arise when legislators consistently fail to pay the state's required contribution into the system, which is exactly what happened in in Pennsylvania.... Later in 2013, Gov. Corbett and Rep. Mike Tobash proposed a 'hybrid' system for new employees -- a plan that combines elements of a DB and DC plan. This time, independent actuaries found that the plan saved few taxpayer dollars -- and that the cuts in benefits were greater than the savings to the state."
(Centre Daily Times)
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[Opinion]
Are Pensions Systemically Important in Canada?
"[T]he Deputy Governor of the Bank of Canada spelled it out clearly, pension funds in general, 'are not a source of systemic risk' and because of their long investment horizon, they are a net provider of liquidity and collateral to the system, 'especially in times of stress.' So why would we want to introduce a new federal regulator who has the power to encroach and/or restrict investment decisions made by pensions? While there's definitely a rationale to have a central securities regulator, the proposed legislation needs to be significantly revised, especially as it pertains to pensions."
(Pension Pulse)
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Benefits in General; Executive Compensation
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Employers Can Be Liable for FICA Withholding Errors
"The class action suit against Henkel Corporation was filed in 2012 by a former employee who claimed harm because his deferred compensation benefit vested on his retirement, but the employer failed to withhold and pay the FICA taxes at that time. Once the employer realized its error, the employer then withheld FICA taxes from each benefit payment as it was made and also paid the missed FICA taxes, reimbursing itself by reducing the deferred compensation payments to the employee.... [T]he court ruled that the employer was liable to the former employees for damages resulting from the withholding error. The court must still determine the amount of those damages -- and attorneys' fees incurred by the former employees in prosecuting the lawsuit." [Davidson v.
Henkel Corp., No. 12-cv-14103 (E.D. Mich. Jan. 6, 2015)]
(Stinson Leonard Street)
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Press Releases
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